SEC Panel on Stocks Scandal Revokes R&L Investments’ License and Slaps Hefty Fines

The license of the brokerage R&L Investments, Inc. has been revoked by a Securities and Exchange Commission (SEC) panel after more than a year since it was discovered that a rogue employee was stealing shares from the company’s clients.

Additionally, a ₱25 million accumulated penalty was imposed on the brokerage firm, some key personnel, and the owner of the account where the stolen shares were being transferred into.

R&L Investments President Joseph Lee, nominee and salesman Lucy Linda Lee, and associated person Jonathan Lee were all found liable by the SEC’s Markets and Securities Regulation Department (MSRD) for the fraudulent activities that transpired.

Marlo Moron, an R&L Investments trading floor assistant and settlement clerk, was the primary individual who was caught stealing client’s shares and transferring them to a Venture Securities account under Julieto Sulapas.

From 2012 to 2019, over ₱1.13 billion R&L Investments client shares were transferred by Moron to Sulapas’ account.

“The scheme resulted in the loss of P700-million worth of client shares in R&L and in the consequent deterioration of the brokerage’s financial condition, to the extent that it cannot readily meet the demands of its clients for the delivery of securities and/or payment of sales proceeds,” explained the SEC.

Joseph Lee was fined ₱6 million and has since been disqualified from being a registered person under the Securities Regulation Code (SRC). Jonathan Lee and Lucy Linda Lee were also disqualified from being registered persons and were slapped with a ₱6 million fine and ₱4 million fine, respectively.

Moron was fined ₱2 million while Sulapas was imposed a ₱1-million penalty for allowing his accounts “to be used as a tool in the commission of the fraudulent scheme.”

Source: BusinessWorld